A burgeoning middle class and higher disposable incomes in Asia is only helping fuel the interest in investment opportunities. According to the Abacus International Report, travel by the middle class will grow as Asia expects to add at least an additional 2.5 billion people to its middle class by 2030 – numbers that get the most conservative investor excited.
With such an expansion in Asian tourism, both inbound and outbound, it is paramount that infrastructure develops in a strategic manner that includes targeted investments.
Industry experts have already noted a great shortage of business grade, four- and five-star hotels in the region, just one area of opportunity for investment in Asian tourism.
To cater to the increase in demand, as well as the changing needs of the rising affluent Asian traveller, billion-dollar investments have already begun in the development of tourism infrastructure and concepts in Asia.
According to STR Global, which tracks the supply and demand data for the hotel industry, there are about 410,000 hotel rooms in the pipeline for Asia-Pacific. Of these, China will account for 56 per cent.
If the major hoteliers are setting up in force, then you know they believe opportunities are rife, particularly when they are moving into second and third tier cities.
One such example is Starwood Hotels & Resorts Worldwide, which is planning for 100 more hotels under several of its hotel brands.
Singapore has also attracted its share of tourism investments. New hotels have contributed to an increase in the number of hotels from 268 to 304 by the end of last year, while a host of new shopping, leisure, business and entertainment options have also come on-stream.
Interestingly, investments in mixed-used developments, such as the two Integrated Resorts by Las Vegas Sands and Genting Group, point to an increasing focus on developing integrated experiences for customers.
Similarly, in Shanghai, the Shanghai Disney Resort, expected to be completed in 2015, will incorporate a theme park, hotels, dining, entertainment, retail and recreational facilities.
The LEGOLAND theme park in Malaysia will also include a LEGOLAND hotel in 2014 to create an integrated destination resort experience for families.
Of course, infrastructure development needs government interest alongside private investment.
Fortunately, the majority of Asian state governments are spending on tourism development.
Representatives of the governments of Laos, Myanmar, Thailand and Vietnam convened to discuss measures to facilitate cooperation for economic and tourism development along the Trans-Asia Highway (East-West Economic Corridor), which is part of the Mekong Delta.
With the implementation of this 1,450 km economic corridor spanning 19 cities of the four countries, it is set to spur more travel and tourism developments in the near future.
Vietnam – a country of great interest to international investors – has plans underway to promote its maritime tourism through the hosting of an international tourism fair and leveraging more than 3,000km of coast and seaside resorts.
Hanoi is also set to increase development efforts on amusement centres to cater to foreign travellers.
Korean company Keangnam Vina Limited Company opened the 72-storey Hanoi Landmark building in May 2012, the highest observatory in Vietnam that not only offers a bird’s eye view of the city, but also comprises serviced apartments, commercial and office spaces.
In June 2012, The Holiday Inn Express marked the brand’s first foray into Southeast Asia with the opening of The Holiday Inn Express Bangkok Siam in Thailand.
The fast-growing hotel chain also announced plans to open 12 new properties in the region in the next two years.
Another example is the fact that investments in Phuket’s hotel property sector are set to exceed US $315 million this year.
Investors always enjoy something new on the menu and Myanmar is increasingly attractive to as its many economic sanctions are gradually being lifted.
Hoteliers in particular, are eyeing a slice of Myanmar’s hospitality sector, and experts said they expect demand for hotel rooms to grow at levels that the country has never seen before.
In Singapore, the hotel sector is similarly riding the wave of growth. Orchard Parade Holdings Ltd. (OPH) had earlier revealed plans to expand its hotel management business in Southeast Asia to tap the region’s tourism growth.
According to a report by real estate consultancy CBRE, the supply of hotel rooms in Singapore is expected to increase by 20 per cent by 2016. CBRE said the ramping up of room supply is underpinned by a healthy outlook for the hospitality sector.
Many investors are also continuing to acquire assets in Asia, recording $3.9 billion across Asia in September 2011, an increase of 50 per cent over September 2010, with the largest proportion coming from China, Singapore and Japan.
President and Chief Executive Officer Pan Pacific Hotels Group, Patrick Imbardelli , said: “Our development focus is in Asia and we have, since 2009, opened and rebranded hotels, resorts and serviced suites in China, Indonesia, Thailand and Malaysia.
“This year three more properties are opening for us in China and Singapore. As Asia business and intra-Asia travel experience further growth, we see huge development opportunity not just in hotels but the extended stay segment for both of our brands.”
Of course, in order to make the most of these huge opportunities, it is essential that those in travel and tourism convene to discuss strategies, explore potential and network.
From the 15-19 October in Singapore, TravelRave 2012, Asia’s most influential travel and tourism festival, provides a prime platform for business leaders and professionals in the travel and tourism industry to convene, network, share knowledge and insights, discover new business opportunities and celebrate Asian tourism at its best.
The Asia Pacific Tourism Destination Investment Conference (TDI Asia 15-17 OCtober), one of the events under TravelRave, which was first introduced as the half-day Asia Pacific Hotel and Tourism Investment Conference last year, has evolved into a three-day event this year.
The event will focus on Hotel Investments and Tourism Infrastructure Development across Asia and will include an array of networking opportunities, business meetings, exhibition and thought-provoking conferences.
Leaders from across the tourism industry such as Matthew Mrozinski, Managing Director, Head of Real Estate & Lodging, Global Investment Banking Asia Pacific, Citigroup Global Markets Asia, Bernold Schroeder, CEO, Jin Jiang Hotel Management, Robert Naso, Managing Director, Clear Bridge Asia Capital Pvt Ltd and India Real Estate Partners Pvt Ltd and Annabella S Wisniewski, President and CEO, Raintree Management Partners, will gather to discuss regional investment opportunities and strategies in hospitality, tourism destination planning and infrastructure development across Asia.
“We are very excited about showcasing some of the region’s most talked about development projects and help match investors to suitable projects across Asia.” said Jens Cornelissen, Conference Director for TDI Asia.
Ensure you are there to establish yourself and your company are at the fore of travel and tourism in Asia, and explore the many opportunities that are waiting for you.